<PAGE> 1
Form 10-KSB-Annual or Transitional Report
Under Section 13 or 15 (d)
Form 10-KSB
(Mark one)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
Commission file number 0-18419
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
---------------------------------------------
(Name of small business issuer in its charter)
Delaware
(State or other jurisdiction of 31-1266850
incorporation or organization) (IRS Employer
Identification No.)
3632 Wheeler Road, Suite 2
P.0. Box 204227
Augusta, Georgia 30917-4227
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (706) 863-2222
Securities registered under Section 12(b) of the Exchange Act:
None
----
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
-------------------------
(Title of class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [X]
State issuer's revenues for its most recent fiscal year: $237,000.
State the aggregate market value of the voting partnership interest held by
non-affiliates computed by reference to the price at which the partnership
interest were sold, or the average bid and asked prices of such partnership
interest, as of the specified date within the past 60 days: Market value
information for the registrant's partnership interest is not available. Should
a trading market develop for these interests, it is the Managing General
Partner's belief that the aggregate market value of the voting partnership's
interest would not exceed $25,000,000.
----------------------------
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated May 12, 1989 (included in
Registration Statement, No. 33-27407, of Registrant) are incorporated by
reference into Parts I and III.
<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Brunner Companies Income Properties L.P. III (the "Partnership" or
"Registrant") was liquidated on December 30, 1999. The Partnership was a
Delaware limited partnership founded in March 1989. Brunner Management Limited
Partnership (the "General Partner"), an Ohio limited partnership formed in
February 1988, is the sole general partner of the Partnership. 104 Management,
Inc. (the "Managing General Partner"), an Ohio corporation founded in February
1988, is the sole general partner of the General Partner, and in that capacity
manages the business of the Partnership.
As of December 30, 1999, the Partnership had 850,900 units of Class A Limited
Partnership Interest ("Units") and 8,600 units of Class B Limited Partnership
Interest ("Subordinated Interest") issued and outstanding. The Subordinated
Interest was sold to the Managing General Partner. Holders of the Units are
referred to as "Unitholders", the holder of the Subordinated Interest is
referred to as the "Subordinated Limited Partner", and Unitholders and the
Subordinated Limited Partner are collectively referred to as "Limited
Partners." Limited Partners are not required to make any additional capital
contributions. There are only two differences between the Class A and Class B
limited partnership interests. First, the holders of Class A units are entitled
to receive their Class A Priority Return before the holders of Class B units
are entitled to receive any portion of their Class B Priority Return. Second,
holders of Class B units, if such holders are affiliates of the General
Partners, are not entitled to vote upon the removal of the General Partner or
upon consideration of a sale of any Retail Center to the General Partner or any
affiliate of the General Partner.
The offering terminated in September 1989. Upon termination of the offering,
the Partnership had accepted subscriptions for 851,400 Units of Class A
Interest and 8,600 units of Class B Interest purchased by the General Partner
for aggregate gross proceeds of $8,506,170. The number of Class A Limited
Partnership units has decreased due to Class A Limited Partners abandoning
their units. The Partnership invested substantially all of the net offering
proceeds in four investment properties (the "Retail Centers") which were
acquired on September 22, 1989. During 1995, two of these Retail Centers were
foreclosed upon by their lenders. The two remaining Retail Centers were
foreclosed upon by their lenders in 1999. The Partnership will not acquire or
invest in any other properties or debt or equity securities of any other issues
(other than short term investments of cash in high grade United States
government obligations during interim periods between the receipt of revenues
and the distribution of cash to the Limited Partners and pending payment of
operating expenses of the Partnership) and will not issue any additional
limited partnership interests or other equity securities in the Partnership.
The policies of the Partnership noted above can only be changed by an
affirmative vote of limited partners owning a majority in interest and the
General Partner. The General Partner and the Managing General Partner are
affiliates of a related group of corporations and partnerships engaged
generally in the real estate development business. Pursuant to an agreement
effective December 31, 1992, IBGP, Inc., an affiliate of Insignia Financial
Group, Inc. ("Insignia"), acquired a majority of the outstanding stock of 104
Management Inc. on March 5,
2
<PAGE> 3
1993. IBGP, Inc. was an indirect wholly-owned subsidiary of Metropolitan Asset
Enhancement, L.P. ("MAE"), an affiliate of Insignia. Both IBGP, Inc. and
Insignia Brunner, L.P. were affiliates of Metropolitan Asset Enhancement, L.P.
104 Management, Inc. is the managing general partner of Brunner Management
Limited Partnership, which is the general partner of the Registrant. On
November 17, 1998, BCIP I & III, LLC purchased 104 Management, Inc. from IBGP,
Inc. and thereby acquired the general partnership interest in Brunner
Management Limited Partnership. BCIP I & III, LLC also purchased the limited
partnership interest in Brunner Management Limited Partnership and all of the
outstanding Class B Limited Partnership units of the Partnership and Brunner
Companies Income Properties L.P. I, an affiliated entity, from Insignia
Brunner, L.P.
ITEM 2. DESCRIPTION OF PROPERTIES
The Partnership was in the business of owning and operating for investment two
regional shopping centers: Gateway Plaza, Mt. Sterling, Kentucky, and Highpoint
Village, Bellefontaine, Ohio. During 1999 these properties were foreclosed
upon, resulting in the liquidation of the Partnership in 1999.
ITEM 3. LEGAL PROCEEDINGS
In January 1999, the Managing General Partner elected to stop making mortgage
payments because the Managing General Partner believed the debt collateralizing
the Centers exceeded the market values of those properties. Attempts to
renegotiate the mortgage notes payable were unsuccessful. The lenders declared
the entire indebtedness immediately due and payable and instituted foreclosure
proceedings in the Court of Common Pleas of Logan County, Ohio, and the
Montgomery Circuit Court of the Commonwealth of Kentucky. Receivers were
appointed for Highpoint Village Shopping Center effective February 4, 1999, and
for Gateway Plaza Shopping Center effective March 16, 1999. In August 1999, the
lender foreclosed on Gateway Plaza and in November 1999, the lender foreclosed
on Highpoint Village. As a result, the Partnership was liquidated in 1999.
Notices of Satisfaction of Judgement for both foreclosure proceedings were
filed in the respective Courts on January 12, 2000.
At December 30, 1999 there were no other outstanding legal matters.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fiscal year ended December 30, 1999, no matters were submitted to a
vote of the Unitholders through the solicitation of proxies or otherwise.
3
<PAGE> 4
PART II
ITEM 5. MARKET FOR PARTNERSHIP EQUITY AND RELATED PARTNER MATTERS
As of December 30, 1999, the number of holders of record of limited partnership
units and Subordinated Interest Units was 668 and One, respectively.
On December 30, 1999, final assets of the Partnership totaling $509,000 were
distributed to the liquidation trustee for distribution to the unit holders.
Approximately $10,000 is reserved for estimated liquidation expenses with the
remaining $499,000 to be distributed to the Class A limited partnership
unitholders.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
On September 30, 1999 the Partnership adopted the liquidation basis of
accounting. In January 1999 the General Managing Partner ceased making mortgage
payments and attempted to renegotiate the mortgage notes payable on Gateway
Plaza and Highpoint Village. The lenders responded by foreclosing on both
properties. The managing General Partner then decided to liquidate the
partnership.
As a result of the foregoing, the Partnership changed its basis of accounting
for its financial statements at September 30, 1999, from the going concern
basis of accounting to the liquidation basis of accounting. Consequently, due
to the foreclosures, the Partnership's investment properties were written-off
in satisfaction of the mortgage notes payable on September 30, 1999.
The Partnership's net income for the nine months ended September 30, 1999 was
$385,000. The adoption of the liquidation basis of accounting created a net
gain of $682,000 which offset a net loss from operations of $297,000. Net
income included rental and other income of $237,000 generated prior to the
appointment of the receivers to manage the properties. Operating expenses of
$534,000 included a write down of certain assets to their net realizable
values.
4
<PAGE> 5
ITEM 7. FINANCIAL STATEMENTS
Brunner Companies Income Properties L.P. III
List of Financial Statements
Report of Independent Certified Public Accountants
Statement of Net Assets in Liquidation
Statement of Changes in Net Assets in Liquidation
Statements of Operations
Statement of Changes in Partners' Capital (Deficit)/Net Assets in Liquidation
Statements of Cash Flows
Notes to Financial Statements
5
<PAGE> 6
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Partners
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
We have audited the statements of operations, changes in partners'
capital (deficit)/net assets in liquidation and cash flows of BRUNNER COMPANIES
PROPERTIES L.P. III (a partnership in liquidation) for the nine months ended
September 30, 1999 and the year ended December 31, 1998. In addition, we have
audited the statement of net assets in liquidation as of December 30, 1999 and
the related statement of changes in net assets in liquidation for the period
from September 30, 1999 to December 30, 1999. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Partnership's management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note A to the financial statements, the General
Partner of the Partnership commenced liquidation of the Partnership pursuant to
the Partnership's investment properties being foreclosed upon. As a result, the
Partnership changed its basis of accounting on September 30, 1999, from the
going concern basis to the liquidation basis.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
BRUNNER COMPANIES INCOME PROPERTIES L.P. III for the nine months ended
September 30, 1999 and the year ended December 31, 1998, its net assets in
liquidation as of December 30, 1999, and the changes in its net assets in
liquidation for the period from September 30, 1999 to December 30, 1999, in
conformity with generally accepted accounting principles.
Augusta, Georgia
February 25, 2000
6
<PAGE> 7
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENT OF NET ASSETS IN LIQUIDATION
DECEMBER 30, 1999
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ ZERO
-------
LIABILITIES
Estimated costs during the period of liquidation Zero
-------
NET ASSETS IN LIQUIDATION $ ZERO
=======
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-7-
<PAGE> 8
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(IN THOUSANDS)
FOR THE PERIOD FROM SEPTEMBER 30, 1999 TO DECEMBER 30, 1999
<TABLE>
<S> <C>
Net assets in liquidation at September 30, 1999 $ 493
Changes in net assets in liquidation attributable to:
(Decrease) increase in cash and cash equivalents for:
Distributions to Class A Limited Partners (499)
Interest income 5
Other changes in net assets in liquidation 1
------
Net assets in liquidation at December 30, 1999 $ --
======
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-8-
<PAGE> 9
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT UNIT DATA)
<TABLE>
<CAPTION>
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
REVENUE
Rental income $ 191 $ 1,532
Other income 46 544
---------- ----------
237 2,076
---------- ----------
EXPENSES
Operating 76 306
General and administrative 110 182
Depreciation 113 425
Interest 6 1,068
Property taxes 29 118
Write down of assets 200 --
---------- ----------
534 2,099
---------- ----------
NET LOSS BEFORE ADJUSTMENT TO
LIQUIDATION BASIS (297) (23)
Adjustment to liquidation basis 682 --
---------- ----------
NET INCOME (LOSS) $ 385 $ (23)
========== ==========
Net income (loss) allocated to General Partner $ 4 $ --
(1)%
Net income (loss) allocated to Class A Limited
Partners (98.01)% 377 (23)
Net income (loss) allocated to Class B Limited
Partners (.99)% 4 --
---------- ----------
$ 385 $ (23)
========== ==========
Net income (loss) per Limited Partnership unit $ .45 $ (.03)
========== ==========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-9-
<PAGE> 10
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)/NET
ASSETS IN LIQUIDATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
Limited Partners'
-----------------------
General
Partner's Class A Class B Total
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Original capital contributions $ 1 $ 8,420 $ 86 $ 8,507
======== ======== ======== ========
Partners' capital (deficit) at
December 31, 1998 $ (59) $ 149 $ 18 $ 108
Net income for the nine months
ended September 30, 1999 4 377 4 385
-------- -------- -------- --------
Net assets in liquidation at
September 30, 1999 $ (55) $ 526 $ 22 $ 493
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-10-
<PAGE> 11
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE NINE FOR THE YEAR
MONTHS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 385 $ (23)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Adjustment to liquidation basis (682) --
Write down of assets 200 --
Depreciation 113 425
Amortization of loan costs and leasing
Commissions 1 19
Change in deferred and accrued amounts
Accounts receivable 24 49
Other assets 30 (39)
Accounts payable and accrued expenses (265) 215
Tenant security deposits payable -- 9
-------- --------
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (194) 655
-------- --------
INVESTING ACTIVITIES
Purchase of property improvements -- (345)
-------- --------
FINANCING ACTIVITIES
Payments on mortgage notes payable -- (263)
-------- --------
Net (decrease) increase in cash and cash equivalents (194) 47
Cash and cash equivalents at beginning of period 884 837
-------- --------
Cash and cash equivalents at end of period $ 690 $ 884
======== ========
Supplemental disclosure of cash flow information:
Interest paid $ 6 $ 1,067
======== ========
</TABLE>
The accompanying notes are an integral part of
these financial statements.
-11-
<PAGE> 12
BRUNNER COMPANIES INCOME PROPERTIES L.P. III
NOTES TO FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION AND NATURE OF OPERATIONS
During January 1999, the General Partner elected to stop making
mortgage payments and sought to renegotiate the mortgage notes payable with the
lenders. Those efforts were ultimately unsuccessful and the lenders instituted
foreclosure proceedings. On February 4, 1999, the lender, Peoples Benefit Life
Insurance Company, through its agent Aegon Realty Advisors, commenced
foreclosure proceedings against Highpoint Village Shopping Center in the Court
of Common Pleas of Logan County Ohio. Similarly, on February 11, 1999, the
lender, Commonwealth Life Insurance Company, through its agent Aegon Realty
Advisors, commenced foreclosure proceedings against Gateway Plaza Shopping
Center in the Montgomery Circuit Court of the Commonwealth of Kentucky.
Pursuant to the foreclosure proceedings, a receiver was appointed by
the Courts to collect rents and pay all expenses arising from the ordinary
operation of the investment properties. Subsequently, in August 1999, the
lender foreclosed on Gateway Plaza Shopping Center located in Mt. Sterling,
Kentucky and in November 1999, the lender foreclosed on Highpoint Village
Shopping Center located in Bellefontaine, Ohio. As a result of the
foreclosures, the Partnership began and completed liquidation in 1999.
On September 30, 1999 the Partnership adopted the liquidation basis of
accounting.
As a result of the foregoing, the Partnership changed its basis of
accounting from the going concern basis to a liquidation basis. The
Partnership's investment properties were revalued to their net realizable value
and liabilities were adjusted to their estimated net amount due in final
settlement, including estimated costs associated with carrying out the
liquidation, with the lenders and other creditors. The valuation of assets and
liabilities necessarily required estimates and assumptions and there were
significant uncertainties in carrying out the liquidation.
From the beginning of the year until the foreclosures, the
Partnership's mortgage notes payable balances, which were nonrecourse, exceeded
the carrying amounts of the Partnership's investment properties. Pursuant to,
and in anticipation of, the foreclosures the Partnership's investment
properties were written-off in satisfaction of the mortgage notes payable on
September 30, 1999.
On December 30, 1999 the General Partner transferred the Partnership's
remaining cash to an independent escrow agent for payment of final legal and
related costs and final distribution to the Class A Limited Partners. Of the
$509,000 transferred on December 30, 1999, $499,000 was for distribution to the
Class A limited Partners and $10,000 was for payment of final legal and related
liquidation costs.
-12-
<PAGE> 13
NOTE B - ADJUSTMENT TO LIQUIDATION BASIS OF ACCOUNTING
At September 30, 1999, in accordance with the liquidation basis of
accounting, assets were adjusted to their estimated net realizable value and
liabilities were adjusted to their settlement amount including estimated costs
associated with carrying out the liquidation. The net adjustment required to
convert to the liquidation basis of accounting was an increase in net assets of
$681,682. Significant adjustments are summarized as follows (in thousands):
<TABLE>
<CAPTION>
INCREASE
(DECREASE)
IN NET ASSETS
-------------
<S> <C>
Adjustment from book value of investment
properties to estimated net realizable value $ (10,652)
Adjustment to record estimated liabilities
associated with the liquidation 60
Adjustment of debt to settlement amount 11,393
Adjustment of other assets and liabilities (119)
---------
Adjustment to liquidation basis $ 682
=========
</TABLE>
NOTE C - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Brunner Companies Income Properties L.P. III (the "Partnership") a
Delaware limited partnership, which was formed on March 10, 1989, acquired and
operated the following retail centers: Gateway Plaza, a 160,021 square foot
retail center in Mt. Sterling, Kentucky and Highpoint Village, a 173,303 square
foot retail center in Bellefontaine, Ohio (collectively referred to as the
"Retail Centers"). The seller of these Retail Centers was affiliated with the
then General Partner of the Partnership.
The General Partner of the Partnership was Brunner Management Limited
Partnership ("General Partner"). The General Partner is an Ohio limited
partnership whose general partner is 104 Management, Inc. ("Managing General
Partner"). From March 5, 1993 until November 17, 1998, the majority of the
outstanding stock of 104 Management, Inc. was held by IBGP, Inc., an affiliate
of Insignia Financial Group, Inc. Prior to November 17, 1998, IBGP, Inc.
effectively controlled the Managing General Partner of the Partnership.
On November 17, 1998, BCIP I & III, LLC (a Georgia limited liability
company and affiliate of Hull/Storey Development, LLC) purchased all of the
outstanding stock of 104 Management, Inc. and thereby acquired the general
partnership interest in Brunner
(Continued)
-13-
<PAGE> 14
NOTE C - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Management Limited Partnership. BCIP I & III, LLC also purchased all of the
outstanding Class B Limited Partnership units of the Partnership. As a result
of this transaction, BCIP I & III, LLC effectively controlled the Managing
General Partner of the Partnership.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Partnership considered all highly liquid investments with a
maturity, when purchased, of three months or less to be cash equivalents as
well as operating cash held by the real estate management company on behalf of
the Partnership's individual properties.
LEASE COMMISSIONS
Lease commissions were capitalized and amortized by the straight-line
method over the term of the applicable lease. During 1999, the capitalized
lease commissions were adjusted to their net realizable value.
TENANT SECURITY DEPOSITS
The Partnership required security deposits from lessees for the
duration of the lease. Pursuant to the foreclosures and related settlement with
the lenders, tenant security deposits were adjusted to their settlement amount.
INVESTMENT PROPERTIES
Prior to their foreclosure, investment properties were stated at cost
and acquisition fees were capitalized as a cost of real estate. The investment
properties were foreclosed upon by the lender and taken in full satisfaction of
the outstanding mortgage notes payable which exceeded the carrying amounts of
the Partnership's investment properties resulting in a gain on foreclosure
which is included in the Partnership's adjustment to the liquidation basis (SEE
NOTE B).
DEPRECIATION
Buildings and improvements were depreciated on the straight-line basis
over an estimated useful life of 5 to 31.5 years, and tenant improvements were
depreciated over the term of the applicable leases. No depreciation was
recorded subsequent to the appointment of the receivers who assumed control of
the investment properties.
(Continued)
-14-
<PAGE> 15
NOTE C - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
For Federal income tax purposes, the Partnership depreciated a portion
(90 percent attributable to non tax-exempt investors) of the property's basis
using the straight-line method over 31.5 years and the balance (10 percent
attributable to tax-exempt investors) using the straight-line method over 40
years.
ADVERTISING
The Partnership expensed the costs of advertising as incurred.
LEASES
The Partnership leased certain commercial space to tenants under
various lease terms. For leases with fixed rental increases during their term,
rents were recognized on a straight-line basis over the terms of the leases.
For all other leases, rents were recognized over the terms of the leases as
earned.
INCOME TAXES
No provision has been made in the financial statements for Federal
income taxes because under current law, no Federal income taxes are paid
directly by the Partnership. The Partners are responsible for their respective
share of Partnership net income or loss.
PARTNERSHIP ALLOCATIONS
Taxable allocations or loss from operations were allocated 98.01% to
the Class A Limited Partners, .99% to the Class B Limited Partners and 1% to
the General Partner.
NOTE D - PARTNERSHIP DISSOLUTION
Upon dissolution, as defined in the partnership agreement, the affairs
and business of the Partnership was wound up and terminated, the Partnership's
liabilities were discharged and the liquidation proceeds were distributed in
the following manner:
First, to the payment of debts and liabilities of the
Partnership (including any loans from any partner to the Partnership)
and the payment of expenses of the winding up of the affairs and
business of the Partnership.
Second, to the setting up of any reserves (to be held by the
Liquidation Manager in an interest-bearing account) which the
Liquidation Manager may deem necessary or appropriate for any
contingent or unforeseen liabilities or obligations of the
Partnership; provided, however, that at the expiration of such time as
the Liquidation Manager deems necessary or appropriate, the balance of
such reserves remaining after payment of such obligations shall be
distributed by the Liquidation Manager in the manner hereinafter set
forth:
(Continued)
-15-
<PAGE> 16
NOTE D - PARTNERSHIP DISSOLUTION, CONTINUED
The balance, if any, of such liquidation proceeds shall
be distributed to the Partners in accordance with the
positive balances in their Capital Accounts.
If any Limited Partner shall have a deficit Capital
Account, the actual distribution to such Limited Partner
shall be equal to the distribution to such Limited Partner
less the amount of the deficit Capital Account balance of
such Limited Partner.
If the Partnership is liquidated and the General
Partner has an Adjusted Capital Account Deficit (after
giving effect to all contributions, distributions and
allocations for all taxable years, including the year during
which such liquidation occurs), then such General Partner
shall contribute to the capital of the Partnership the
amount necessary to restore the Capital Account to zero.
NOTE E - OPERATING LEASES
Tenants were responsible for their own utilities, maintenance of their
space, and payment of their proportionate share of common area maintenance,
utilities, insurance and real estate taxes. Real estate taxes, insurance, and
common area maintenance expenses were paid directly by the Partnership. The
Partnership was then reimbursed by the tenants for their proportionate share.
The expenses paid by the Partnership are included in the accompanying
statements of operations as property taxes and operating expenses. Amounts
reimbursed by the tenants are included in rental income.
NOTE F - INCOME TAXES
The Partnership was classified as a partnership for Federal income tax
purposes. Accordingly, no provision for income taxes was made in the financial
statements of the Partnership. Taxable income or loss of the Partnership is
reported in the income tax returns of its partners.
Differences between the net income (loss) as reported and Federal taxable
income or loss result primarily from depreciation differences, revenue
recognition differences, and other miscellaneous differences.
(Continued)
-16-
<PAGE> 17
NOTE F - INCOME TAXES, CONTINUED
The following is a reconciliation of reported net loss and Federal
taxable loss (in thousands, except unit data):
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
---------------------------
1999 1998
-------- --------
<S> <C> <C>
Net income (loss) as reported $ 385 $ (23)
Add (deduct):
Adjustment to liquidation basis $ 385 $ (23)
Depreciation difference (1) (30)
Unearned income (1) (49)
Miscellaneous 17 (21)
-------- --------
Federal taxable loss $ (2,177) $ (123)
======== ========
Federal taxable loss per
limited partnership unit $ (2.53) $ (.14)
======== ========
</TABLE>
NOTE G - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership had no employees and was dependent on the Managing
General Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement provides for payments to
affiliates for services and for reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were made to
affiliates of the Managing General Partner in 1999 and 1998 (in thousands):
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
Property management fees (included in
operating expenses) $ 11 $ 66
Reimbursement for services of affiliates
(included in general and
administrative expenses) $ -- $ 35
</TABLE>
(Continued)
-17-
<PAGE> 18
NOTE G - TRANSACTIONS WITH AFFILIATED PARTIES, CONTINUED
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
--------------------------
1999 1998
-------- --------
<S> <C> <C>
Lease commissions for new leases
(included in other assets and amortized
over the term of the leases) $ 13 $ 128
General partner capital account deficit
Which was deemed uncollectable $ 55 $ --
</TABLE>
-18-
<PAGE> 19
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements with Elliott, Davis & Company, L.L.P. regarding the
1999 audit of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Partnership had no officers or directors. The Managing General Partner
manages and controls the Partnership and has general responsibility and
authority in all matters affecting its business. The names and ages of the
directors and executive officers of 104 Management, Inc., the Partnership's
Managing General Partner, and the nature of all positions with 104 Management,
Inc. presently held by them are set forth below. There are no family
relationships between or among any officers and directors.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
James M. Hull 48 President and Director
Wayne Grovenstein 31 Vice President and Secretary
Deborah Mosley 46 Chief Accounting Officer
</TABLE>
James M. Hull has been President and Director of the Managing General Partner
and the Member-Manager of BCIP I & III, LLC since November of 1998. BCIP I &
III, LLC is an affiliate of Hull/Storey Development, LLC ("Hull/Storey") Mr.
Hull has acted as Member-Manager of Hull/Storey since December, 1993.
Wayne Grovenstein has been Vice President of the Managing General Partner since
November 1998. Mr. Grovenstein joined Hull/Storey in July 1995 where he serves
as Hull/Storey's Director of Development and Counsel. Prior to joining
Hull/Storey, Mr. Grovenstein was in the private practice of law in Atlanta,
Georgia.
Deborah Mosley has been the Chief Accounting Officer of the Managing General
Partner since November 1998. Ms. Mosley joined Hull/Storey in June 1994 and has
served as Hull/Storey's Chief Accounting Officer since that time.
19
<PAGE> 20
ITEM 10. EXECUTIVE COMPENSATION
No direct form of compensation was paid by the Partnership to any director or
officer of the Managing General Partner for the year ended December 30, 1999.
The Partnership has no plans to pay any such remuneration to any director or
officer of the Managing General Partner in the future. However, reimbursements
and other payments have been made to the Partnership's Managing General Partner
and its affiliates, as described in "Item 12. Certain Relationships and Related
Transactions" below.
20
<PAGE> 21
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 30, 1999, there were 850,900 Limited Partnership Units ("Units")
and 8,600 units of Class B Limited Partnership Interest ("Subordinated
Interest") issued and outstanding. The following table sets forth certain
information, as of December 30, 1999, with respect to the ownership of Units
and units of Subordinated Interest by: (i) any person or group who is known to
the Partnership to be the beneficial owner of more than 5% of either the Units
or units of Subordinated Interest; (ii) the directors and officers of the
Managing General Partner, naming them; and (iii) the directors and officers of
the Managing General Partner as a group.
<TABLE>
<CAPTION>
Units (1)
--------- Interest (1)
Name and Address of Group Amount Percent Amount Percent
- ------------------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Brunner Management L.P. -- -- 8,600 100%
3632 Wheeler Road
Augusta, Georgia 30909
Hamilton National Life 106,383(2) 12.5%
Insurance Company of America
32991 Hamilton Court/Ste 100
Farmington Hills, MI 48334-
3305
Cosmo Plastics Company 50,000 5.9%
30201 Aurora Road
Cleveland, OH 44139
All directors and officers of the -- -- -- --
Managing General Partner
(3 persons) as a group
</TABLE>
(1) The Limited Partners have no right or authority to participate in the
management or control of the Partnership or its business. However, Limited
Partners do have limited rights to approve or disapprove certain fundamental
Partnership matters as provided in "Article 7" of the Partnership Agreement.
Transfer of Units are subject to certain restrictions set forth in "Article 9"
of the Partnership Agreement.
(2) To the best knowledge of the Partnership, these Units are held with sole
voting and investment power (see Note (1) above).
21
<PAGE> 22
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement provides for payments to
affiliates for services and for reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following payments were made to affiliates of the Managing General Partner
in 1999 and 1998:
<TABLE>
<CAPTION>
(in thousands) 1999 1998
---- ----
<S> <C> <C>
Property management fees $ 11 $ 66
Reimbursement for services of affiliates $ -- $ 35
General partner capital account
which was deemed uncollectable $ 55 $ --
</TABLE>
Additionally, the Partnership paid approximately $13,000 and $128,000 during
the years ended December 30, 1999 and December 31, 1998, respectively, to an
affiliate of the Managing General Partner for lease commissions related to new
leases of the Partnership's commercial properties. These lease commissions are
included in other assets and amortized over the term of the respective leases.
The General Partner did not receive cash distributions from or with respect to
the fiscal years ended December 30, 1999 and December 31, 1998.
If the Partnership requires additional funds, the General Partner or its
affiliates may, but are not obligated to, lend funds to the Partnership. Any
such loan and any disposition, re-negotiation or other subsequent transaction
involving such loan, shall be made only upon receipt from an independent and
qualified advisor of an opinion letter to the effect that such proposed loan or
disposition, renegotiation or subsequent transaction is fair and at least as
favorable to the Partnership as a loan to an unaffiliated borrower in similar
circumstances. The advisors compensation must be paid by the General Partner
and is not reimbursable by the Partnership. No such loan has yet been made by
the General Partner.
A commission of up to 2% of the sale price may be paid to Brunner Management
Limited Partnership upon the sale of each of the Retail Centers, if it performs
substantial services in connection with the sale. Any such commission paid to
the Brunner Management Limited Partnership will be subordinated to the Limited
Partners priority distributions. Total commissions paid will not exceed those
reasonable, customary and competitive in light of the size and location of the
Retail Center sold.
22
<PAGE> 23
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1999:
A Form 8-K was filed with the Securities and Exchange Commission on January 11,
2000 to report the foreclosure sales of the Highpoint Village and Gateway Plaza
properties. The General Partner intends to wind up and dissolve the partnership
as of December 30, 1999 and distribute approximately $508,950 to the limited
partners of the Partnership in proportion to each limited partner's partnership
interest, as provided in the Agreement of Limited Partnership.
23
<PAGE> 24
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BRUNNER COMPANIES INCOME PROPERTIES L.P. III,
A Delaware Limited Partnership
By: Brunner Management Limited Partnership
Its General Partner
By: 104 Management, Inc.
Its Managing General Partner
By: /s/ James M. Hull
-------------------------------
James M. Hull
President and Director
Date: 4/14/2000
-----------------
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
President and
/s/ James M. Hull Director Date: 4/14/2000
- ---------------------------- ------------------
James M. Hull
Vice President and
Chief Accounting
/s/ Deborah Mosley Officer Date: 4/14/2000
- ---------------------------- ------------------
Deborah Mosley
24
<PAGE> 25
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
3.1 Partnership Agreement of Brunner Companies Income Properties L.P. III
(the "Partnership"); included as Exhibit B to the Prospectus of
Registrant dated May 12, 1989 contained in Registration Statement No.
33-27407 of Registrant filed May 12, 1989 (the "Prospectus") and
incorporated herein by reference.
3.2 Certificate of Limited Partnership for the Partnership; incorporated
by reference to Exhibit 3.2 to Registration Statement No. 33-27407 on
Form S-11.
4.1 Form of Unitholder Certificate for the Partnership; incorporated by
reference to Exhibit 4.1 to Registration Statement No. 33-27407 on
Form S-11.
4.2 Form of Subordinated Interest Certificate for the Partnership;
incorporated by reference to Exhibit 4.2 to Registration Statement
No.33-27407 on Form S-11.
10.1 Purchase Agreement for Gateway Plaza; incorporated by reference to
Exhibit 19.3 to Form 10-Q for the fiscal quarter ended September 30,
1989.
10.2 First Amendment to Real Property Purchase Agreement for Gateway Plaza,
dated September 22, 1989 between Tennessee & Associates-IV ("T&A-IV")
and the Partnership; incorporated by reference to Exhibit 10.4 to Form
10-K for fiscal year ended December 31, 1989.
10.3 Second Amendment to Real Property Purchase Agreement for Gateway Plaza,
dated March 23, 1990, between T&A-IV and the Partnership; incorporated
by reference to Exhibit 10.5 to Form 10-K for fiscal year ended
December 31, 1989.
10.4 Purchase Agreement for Highpoint Village; incorporated by reference to
Exhibit 19.4 to Form 10-Q for the fiscal quarter ended September 30,
1989.
10.5 First Amendment to Real Property Purchase Agreement for Highpoint
Village, dated September 2, 1989, between Tennessee & Associates-VII
("T&A-VII") and the Partnership; incorporated by reference to Exhibit
10.7 to Form 10-K for fiscal year ended December 31, 1989.
10.6 Second Amendment to Real Property Purchase Agreement for Highpoint
Village, dated March 23, 1990 between T&A-VII and the Partnership;
incorporated by reference to Exhibit 10.8 to Form 10-K for fiscal year
ended December 31, 1989.
10.7 Gateway Plaza Lease with Wal-Mart Stores, Inc.; incorporated by
reference to Exhibit 10.15 to Registration Statement No. 33-27407 on
Form S-11.
</TABLE>
25
<PAGE> 26
<TABLE>
<S> <C>
10.8 Gateway Plaza Lease with J.C. Penny Company, Inc., incorporated by
reference to Exhibit 10.16 to Registration Statement No. 33-27407 on
Form S-11.
10.9 Gateway Plaza Lease with Food Lion, Inc.; incorporated by reference to
Exhibit 10.17 to Registration Statement No. 33-27407 on Form S-11.
10.10 Highpoint Village Lease with Wal-Mart Stores, Inc.; incorporated by
reference to Exhibit 10.18 to Registration Statement No. 33-27407 on
Form S-11.
10.11 Second Amendment to Highpoint Village Lease with Wal-Mart Stores, Inc.;
incorporated by reference to Exhibit 10.27 to Form 10-K for fiscal
year ended December 31, 1989.
10.12 Highpoint Village Lease with The Kroger Co.; incorporated by reference
to Exhibit 10.20 to Registration Statement No. 33-27407 on Form S-11.
10.13 Promissory Note for $5,850,000 secured by a Mortgage on Gateway Plaza,
with Commonwealth Life Insurance Company as Payee, incorporated by
reference to Exhibit 19.26 to Form 10-Q for the fiscal quarter ended
September 30, 1989.
10.14 Promissory Note for $6,600,000 secured by a Mortgage on Highpoint
Village, with Commonwealth Life Insurance Company as Payee;
incorporated by reference to Exhibit 19.27 to Form 10-Q for the fiscal
quarter ended September 30, 1989.
10.15 Mortgage, Assignment of Rents and Security Agreement for Gateway Plaza
to Commonwealth Life Insurance Company; incorporated by reference to
Exhibit 19.28 to Form 10-Q for the fiscal quarter ended September 30,
1989.
10.16 Mortgage, Assignment of Rents and Security Agreement for Highpoint
Village to Commonwealth Insurance Company; incorporated by reference
to Exhibit 19.29 to Form 10-Q for the fiscal quarter ended September
30, 1989.
10.17 Assignment of Rents and Leases for Gateway Plaza to Commonwealth
Insurance Company; incorporated by reference Exhibit 19.30 to Form
10-Q for the fiscal quarter ended September 30, 1989.
10.18 Assignment of Rents and Leases for Highpoint Village to Commonwealth
Insurance Company; incorporated by reference to Exhibit 19.31 to Form
10-Q for the fiscal quarter ended September 30, 1989.
10.19 Modification of Promissory Note, Mortgage and Security Agreement and
Security Documents for Gateway Plaza between T&A-IV and Fleet National
Bank, dated May 12, 1989; incorporated by reference to Exhibit 19.36
to Form 10-Q for the fiscal quarter ended September 30, 1989.
</TABLE>
26
<PAGE> 27
<TABLE>
<S> <C>
10.20 Advisory Agreement made as of September 1, 1991 between Brunner
Companies Income Properties L.P. II and Insignia GP Corporation and
Insignia Financial Group, Inc. by reference to Form l0-Q for the
fiscal quarter ended September 30, 1991.
10.21 First Amendment to Advisory Agreement changing effective date from
September 1, 1991 to October 1, 1991 by reference to Form 10-Q for the
fiscal quarter ended September 30, 1991.
10.22 Transfer Agent Agreement between Brunner Companies Income Properties
L.P. III and Insignia GP Corporation incorporated by reference to
exhibit l0.105 to Form 10-K for fiscal year ended December 31, 1991.
10.23 Property Management Agreement for Highpoint Village incorporated by
reference to exhibit 10.106 to Form 10-K for fiscal year ended
December 31, 1991.
10.24 Property Management Agreement for Gateway Plaza incorporated by
reference to exhibit 10.107 to Form 10-K for fiscal year ended
December 31, 1991.
10.25 Closing Agreement dated October 16, 1992 showing the acquisition of a
majority of the outstanding stock of 104 Management, Inc. by IBGP,
Inc. incorporated by reference to Exhibit 2 to Form 8-K dated March 5,
1993.
10.50 General Partnership Sale Agreement, dated as of November 17, 1998, by
and between BCIP I & III, LEC, BGP, Inc. and Insignia Brunner, L.P.
incorporated by reference to Form 8-K dated December 2, 1998.
10.51 Mutual Release and Settlement Agreement, dated December 8, 1999, by
and between Peoples Benefit Life Insurance Company and Brunner
Companies Income Properties, L.P. III et al.
10.52 Notice of Satisfaction of Judgement, filed on January 12, 2000 in the
Court of Common Pleas of Logan County Ohio by and between Peoples
Benefit Life Insurance Company et al and Brunner Companies Income
Properties, L.P. III et al.
10.53 Mutual Release and Settlement Agreement, dated December 8, 1999, by and
between Monumental Life Insurance Company et al and Brunner Companies
Income Properties, L.P. III.
10.54 Notice of Satisfaction of Judgement, filed on January 12, 2000 in the
Commonwealth of Kentucky, Montgomery Circuit Court, Civil Branch, by
and between Commonwealth Life Insurance Company and Brunner Companies
Income Properties, L.P. III et al.
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
27
<PAGE> 1
EXHIBIT 10.51
IN THE COURT OF COMMON PLEAS OF LOGAN COUNTY, OHIO
Peoples Benefit Life Insurance Company )
(Through Its Agent AEGON USA Realty )
Advisors, Inc.) fka Providian Life and Health )
Insurance Company fka National Home )
Life Assurance Company, )
)
Plaintiff, ) Case No. CV99-02-0035
)
v. ) Judge Mark S. O'Connor
)
Brunner Companies Income Properties L.P. III, )
et al., c/o Brunner Management, L/P. )
c/o Hull/Storey Development, LLC, )
)
Defendants. )
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement entered into this 8th day
of December, 1999, by and between PEOPLES BENEFIT LIFE INSURANCE COMPANY, by
and through its agent, AEGON USA REALTY ADVISORS, INC., hereinafter referred to
as "Peoples", and BRUNNER COMPANIES INCOME PROPERTIES, L.P., III hereinafter
referred to as "Brunner".
W I T N E S S E T H:
WHEREAS, Peoples has instituted action against Brunner in the Logan
County, Ohio Common Pleas Court, as Case No. CV99-02-0035.
WHEREAS, Brunner has heretofore objected to any relief sought by
Peoples regarding any claims against Brunner for any non-recourse debt alleged
to have been owed to Peoples and secured by property of Brunner; and
<PAGE> 2
WHEREAS, Peoples has heretofore sought and obtained a Summary Judgment
and Order of Sale of that certain property owned by Brunner and heretofore
given as security for a non-recourse debt to Peoples; and
WHEREAS, Brunner is in possession of certain funds in which Peoples
maintains it has an interest and a portion of which Peoples alleges to be owed
by Brunner; and
WHEREAS, the parties hereto are desirous of settling between them any
and all claims that have been made or could have been made by each against the
other in the above-styled civil action;
NOW THEREFORE IN CONSIDERATION OF THE PREMISES, and the mutual
undertakings of the parties, the benefits of which shall flow each to the
other, the parties hereto do agree as follows:
1.
That Peoples has heretofore obtained a Summary Judgment and Order of
Sale in the aforesaid civil action, and pursuant thereto, a judicial sale of
the real property has occurred on October 20, 1999, and the same has been
confirmed by Order dated November 4, 1999.
2.
That Peoples shall enter a Notice of Satisfaction of Judgment in the
aforesaid civil action.
3.
That simultaneously with the execution of this Mutual Release and
Settlement Agreement, Brunner shall pay to Peoples the sum of Sixty-Two
Thousand Five Hundred ($62,500.00) Dollars and in consideration of such payment
and other valuable consideration, the sufficiency of which and the receipt of
which are hereby acknowledged, Peoples, its respective
-2-
<PAGE> 3
officers, directors, employees, executors, administrators, agents, attorneys,
successors and assigns shall and do hereby release and discharge, and by these
presents do release and forever discharge Brunner, its respective officers,
directors, employees, executors, administrators, agents, attorneys, successors
and assigns, and all other persons, firms or corporations whomsoever of and
from all claims, demands, damages, action or causes of action resulting, or to
result, known and unknown, which have been asserted or could have been asserted
in the aforesaid civil action, except and to the extent that Brunner shall
receive any rental income, reimbursement, or other form of income in any way
related to the aforesaid real property subsequent to June 22, 1999, Brunner
shall be obligated to forthwith pay the same to Peoples.
4.
That simultaneously with the execution of this Mutual Release and
Settlement Agreement, and in consideration thereof, and other valuable
consideration, the sufficiency of which and the receipt of which are hereby
acknowledged, Brunner, its respective officers, directors, employees, executors,
administrators, agents, attorneys, successors and assigns shall and do hereby
release and discharge, and by these presents do release and forever discharge
Peoples, its respective officers, directors, employees, executors,
administrators, agents, attorneys, successors and assigns, and all other
persons, firms or corporations whomsoever, including Aegon USA Realty Advisors,
Inc., of and from all claims, demands, damages, action or causes of action
resulting, or to result, known and unknown, which have been asserted or could
have been asserted in the aforesaid civil action.
5.
That it is understood and agreed that this settlement is the compromise
of potential, doubtful and disputed claims and that this Mutual Release and
Settlement agreement is
-3-
<PAGE> 4
not and shall not be construed to be an admission of liability or guilt on the
part of the parties hereby released.
6.
That this Mutual Release and Settlement Agreement is entered into by
and between the parties hereto without any party admitting any liability to the
other; all such liability being expressly denied.
7.
That the undersigned hereby declare that this Mutual Release and
Settlement agreement contains the entire understanding among the parties and
that the terms hereof have been completely read and are fully understood and
voluntarily accepted for the purpose of making a full compromise, adjustment and
settlement of all claims referred to above and for the express purpose of
precluding any future litigation based upon any such claims.
Signed, sealed and delivered at Cedar Rapids, on this 8th day of
December, 1999.
PEOPLES BENEFIT LIFE
INSURANCE COMPANY
By: /s/ Thomas L. Nordstrom
--------------------------
As its: Second Vice President
SWORN TO AND SUBSCRIBED BEFORE
ME THIS 8TH DAY OF DECEMBER, 1999,
IN THE PRESENCE OF:
/s/ Tamra L. Brus
- ---------------------------------
Tamra L. Brus
NOTARY PUBLIC STATE OF IA
-4-
<PAGE> 5
BRUNNER COMPANIES
INCOME PROPERTIES, L.P., III
By: /s/ James M. Hull
-------------------------
As its: Agent
SWORN TO AND SUBSCRIBED BEFORE
ME THIS 6th DAY OF JANUARY, 2000
IN THE PRESENCE OF:
/s/ J. Richard Dunstan
- ----------------------
/s/ Kathy S. Huskey
- ----------------------
NOTARY PUBLIC
STATE OF GEORGIA
-5-
<PAGE> 1
EXHIBIT 10.52
IN THE COURT OF COMMON PLEAS OF LOGAN COUNTY, OHIO
Peoples Benefit Life Insurance Company )
(Through Its Agent AEGON USA Realty )
Advisors, Inc.) fka Providian Life and Health )
Insurance Company fka National Home )
Life Assurance Company, )
)
Plaintiff, )
vs ) Case No. CV99-02-0035
)
Brunner Companies Income Properties )
L.P. III, et al., c/o Brunner Management, L.P. )
c/o Hull/Storey Development, LLC ) Judge Mark S. O'Connor
)
Defendants. )
NOTICE OF SATISFACTION OF JUDGMENT
NOW COMES, plaintiff, Peoples Benefit Life Insurance Company, by and
through its agent AEGON USA Realty Advisors, Inc., and does hereby provide
notice that the judgment rendered herein in its favor pursuant to that certain
Agreed Order Granting Motion for Summary Judgment filed on July 28, 1999 has
been satisfied in full.
Respectfully submitted,
/s/ Reginald W. Jackson
-----------------------------------
Reginald W. Jackson (0022885)
Vorys, Sater, Seymour and Pease LLP
52 E. Gay Street
Columbus, OH 43215
(614) 464-5621
Attorneys for Plaintiff
<PAGE> 1
EXHIBIT 10.53
COMMONWEALTH OF KENTUCKY
MONTGOMERY CIRCUIT COURT
CIVIL BRANCH
CIVIL ACTION NO. 99-CI-90023
MONUMENTAL LIFE INSURANCE
COMPANY, successor by merger to
COMMONWEALTH LIFE INSURANCE
COMPANY (through its agent,
AEGON USA Realty Advisors, Inc.,)
PLAINTIFF,
VS.
BRUNNER COMPANIES LIMITED
PROPERTIES, L.P., III, a Delaware
limited partnership, et al.,
DEFENDANT.
- ----------------------------------------------
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement entered into this 8 day of
December, 1999, by and between MONUMENTAL LIFE INSURANCE COMPANY, a Maryland
corporation, successor by merger to COMMONWEALTH LIFE INSURANCE COMPANY, by and
through its agent, AEGON USA REALTY ADVISORS, INC., hereinafter referred to as
"Monumental'', and BRUNNER COMPANIES INCOME PROPERTIES, L.P., III, hereinafter
referred to as "Brunner".
WITNESSETH:
WHEREAS, Monumental has instituted action against Brunner in the
Commonwealth of Kentucky, Montgomery Circuit Court, Civil Branch, Case No.
99-CI-90023; and
WHEREAS, Brunner has heretofore objected to any relief sought by
Monumental regarding any claims against Brunner for any non-recourse debt
alleged to have been owed to Monumental and secured by property of Brunner; and
<PAGE> 2
WHEREAS, Monumental has heretofore sought and obtained a Summary
Judgment and Order of Sale of that certain property owned by Brunner and
heretofore given as security for a non-recourse debt to Monumental; and
WHEREAS, Brunner is in possession of certain funds in which Monumental
maintains it has an interest and a portion of which Monumental alleges to be
owed by Brunner; and
WHEREAS, the parties hereto are desirous of settling between them any
and all claims that have been made or could have been made by each against the
other in the above-styled civil action:
NOW THEREFORE IN CONSIDERATION OF THE PREMISES, and the mutual
undertakings of the parties, the benefits of which shall flow each to the
other, the parties hereto do agree as follows:
1.
That Monumental has heretofore obtained a Summary Judgment and Order
of Sale in the aforesaid civil action, and pursuant thereto, a judicial sale of
the real property has occurred on August 6, 1999, and the same has been
confirmed by Order dated August 27, 1999.
2.
That Monumental shall enter a Notice of Satisfaction of Judgment in
the aforesaid civil action.
3.
That simultaneously with the execution of this Mutual Release and
Settlement Agreement, Brunner shall pay to Monumental the sum of Sixty-Two
Thousand Five Hundred ($62,500.00) Dollars, and in consideration of such
payment and other valuable consideration, the sufficiency of which and the
receipt of which are hereby acknowledged, Monumental, its respective officers,
directors, employees, executors,
<PAGE> 3
administrators, agents, attorneys, successors and assigns shall and do hereby
release and discharge, and by these presents do release and forever discharge
Brunner, its respective officers, directors, employees, executors,
administrators, agents, attorneys, successors and assigns, and all other
persons, firms or corporations whomsoever of and from all claims, demands,
damages, action or causes of action resulting, or to result, known and unknown,
which have been asserted or could have been asserted in the aforesaid civil
action, except and to the extent that Brunner shall receive any rental income,
reimbursement, or other form of income in any way related to the aforesaid real
property subsequent to June 22, 1999, Brunner shall be obligated to forthwith
pay the same to Monumental.
4.
That simultaneously with the exception of this Mutual Release and
Settlement Agreement, and in consideration thereof, and other valuable
consideration, the sufficiency of which and the receipt of which are hereby
acknowledged, Brunner, its respective officers, directors, employees, executors,
administrators, agents, attorneys, successors and assigns shall and do hereby
release and discharge, and by these presents do release and forever discharge
Monumental, its respective officers, directors, employees, executors,
administrators, agents, attorneys, successors and assigns, and all other
persons, firms or corporations whomsoever, including AEGON USA Realty Advisors,
Inc., of and from all claims, demands, damages, action or causes of action
resulting, or to result, known and unknown, which have been asserted or could
have been asserted in the aforesaid civil action.
5.
That it is understood and agreed that this settlement is the compromise
of potential, doubtful and disputed claims and that this Mutual Release and
Settlement Agreement is not and shall not be construed to be an admission of
liability or guilt on the part of the parties hereby released.
<PAGE> 4
6.
That this Mutual Release and Settlement Agreement is entered into by
and between the parties hereto without any party admitting any liability to the
other; all such liability being expressly denied.
7.
That the undersigned hereby declare that this Mutual Release and
Settlement Agreement contains the entire understanding among the parties and
that the terms hereof have been completely read and are fully understood and
voluntarily accepted for the purpose of making a full compromise, adjustment and
settlement of all claims referred to above and for the express purpose of
precluding any future litigation based upon any such claims.
Signed, sealed and delivered at Cedar Rapids, on this 8th day of December,
1999.
MONUMENTAL LIFE INSURANCE COMPANY
BY: THOMAS L. NORDSTROM
-----------------------------
As its: Vice President
SWORN TO AND SUBSCRIBED BEFORE ME THIS
8TH DAY OF DECEMBER, 1999,
IN THE PRESENCE OF:
TAMARA L. BRUS
- -------------------------------------
NOTARY PUBLIC STATE OF IA
BRUNNER COMPANIES INCOME
PROPERTIES, L.P., III
BY: JAMES M. HULL
--------------------------
As its: Agent
SWORN TO AND SUBSCRIBED BEFORE ME THIS
6TH DAY OF JANUARY, 2000,
IN THE PRESENCE OF:
J. RICHARD DUNSTAN
- -------------------------------------
KATHY S. HUSKEY
- -------------------------------------
NOTARY PUBLIC STATE OF GEORGIA
<PAGE> 1
EXHIBIT 10.54
COMMONWEALTH OF KENTUCKY
MONTGOMERY CIRCUIT COURT
CIVIL BRANCH
COMMONWEALTH LIFE INSURANCE COMPANY PLAINTIFF
(Through its Agent AEGON USA Realty Advisors, Inc.)
NOTICE OF SATISFACTION NO. 99-CI-90023
OF JUDGMENT
BRUNNER COMPANIES INCOME DEFENDANTS
PROPERTIES, L.P., III, et al
*** *** *** *** ***
The plaintiff, Commonwealth Life Insurance Company (through its agent
AEGON USA Realty Advisors, Inc.) hereby gives notice that the judgment against
the defendant, Brunner Companies Income Properties, L.P., III, which was entered
on July 9, 1999, has been paid and satisfied in full and that there are no other
pending claims or matters in this action.
DATED this 10th day of January, 2000.
STOLL, KEENON & PARK, LLP
201 E. Main Street, Suite 1000
Lexington, Kentucky 40507
Phone: (606) 231-3000
By: /s/ Harvie B. Wilkinson
------------------------
HARVIE B. WILKINSON
ATTORNEYS FOR PLAINTIFF
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-30-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 237
<TOTAL-REVENUES> 237
<CGS> 0
<TOTAL-COSTS> 534
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 200
<INTEREST-EXPENSE> 113
<INCOME-PRETAX> 385
<INCOME-TAX> 0
<INCOME-CONTINUING> 385
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 682
<NET-INCOME> 385
<EPS-BASIC> .45
<EPS-DILUTED> .45
</TABLE>
